AA+

[The.Menace]

No thread about the downgrading yet? Well, here we go....

For everybody that suffers now and in the future 'cause of the downgrading, it's time to say 'Thank you Tea party, thank you republicans'. These stupid and stubborn people cost now millions and trillions....world wide, but also and esp. in the USA. Did u see that coming, Michele Bachmann? No? That's because you are a stupid bitch.

Well yeah. Of course the USA have to cut costs, I said that in the other thread. Start with military and different wars, but that very recent situation was created 'cause of the denial of changes in the tax system. Well. I know what they say - low taxes more jobs - but well, it's not that simple. Or is it, it's simply not true. Stupid republican propaganda. And so that nobody gets me wrong, I don't see the democrats as saviors neigther.But you already have low taxes, no enough jobs and by the way, every 7th american gets food stamps these days. But hey, Apple (insert other companies as u like) makes a lot of money, so why worry?

It's obvious and clear that this (financial) system has to come to an end, I just didn't expect it so soon - but if the Tea party keeps doin what they do, we'll be there rather sooner than later. Let's try to be positiv, we have a chance to create a better system afterwards. The bad thing about it is of course the rebellions, the lose of your money, etc but hey, we can still pray to God if the shit hits the fan. (Texas' Rick Perry actually did it and with him 30 000 brain washed zombies)

 

[S O F I]

Where's Marx when you need him?

 

[Ristol]

Seems to me S&P is politically illiterate.

It's easy to say the Tea Party held the country hostage on the debt deal, and to some extent they did. The rhetoric was definitely a little louder, a little more malicious. But that's par for the course in the age of Obama. What confuses me about S&P's report is this: they seem so surprised, so outraged, that the debt ceiling "has become a political tool." Uh, it's always been one. Whenever it comes up, the party out of power rails against it and makes a big show of financial indignation until the party in power is left to actually make the deal. That's why Senator Obama voted against raising the debt ceiling last time around. It was political theater then, and it's political theater now. Nothing more.

 

[S O F I]

It's not that the S&P is politically illiterate, it's that they have to say things in moderation, PC style. If it was up to him, the credit analyst would probably sound like Krugman, but Krugman's not paying his salary.

 

[S O F I]

gotta love this guy.

To understand the furor over the decision by Standard & Poor’s, the rating agency, to downgrade U.S. government debt, you have to hold in your mind two seemingly (but not actually) contradictory ideas. The first is that America is indeed no longer the stable, reliable country it once was. The second is that S.& P. itself has even lower credibility; it’s the last place anyone should turn for judgments about our nation’s prospects.

Let’s start with S.& P.’s lack of credibility. If there’s a single word that best describes the rating agency’s decision to downgrade America, it’s chutzpah — traditionally defined by the example of the young man who kills his parents, then pleads for mercy because he’s an orphan.


America’s large budget deficit is, after all, primarily the result of the economic slump that followed the 2008 financial crisis. And S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste.


Nor did the bad judgment stop there. Notoriously, S.& P. gave Lehman Brothers, whose collapse triggered a global panic, an A rating right up to the month of its demise. And how did the rating agency react after this A-rated firm went bankrupt? By issuing a report denying that it had done anything wrong.


So these people are now pronouncing on the creditworthiness of the United States of America?
Wait, it gets better. Before downgrading U.S. debt, S.& P. sent a preliminary draft of its press release to the U.S. Treasury. Officials there quickly spotted a $2 trillion errorin S.& P.’s calculations. And the error was the kind of thing any budget expert should have gotten right. After discussion, S.& P. conceded that it was wrong — and downgraded America anyway, after removing some of the economic analysis from its report.


As I’ll explain in a minute, such budget estimates shouldn’t be given much weight in any case. But the episode hardly inspires confidence in S.& P.’s judgment.
More broadly, the rating agencies have never given us any reason to take their judgments about national solvency seriously. It’s true that defaulting nations were generally downgraded before the event. But in such cases the rating agencies were just following the markets, which had already turned on these problem debtors.
And in those rare cases where rating agencies have downgraded countries that, like America now, still had the confidence of investors, they have consistently been wrong. Consider, in particular, the case of Japan, which S.& P. downgraded back in 2002. Well, nine years later Japan is still able to borrow freely and cheaply. As of Friday, in fact, the interest rate on Japanese 10-year bonds was just 1 percent.
So there is no reason to take Friday’s downgrade of America seriously. These are the last people whose judgment we should trust.
And yet America does have big problems.
These problems have very little to do with short-term or even medium-term budget arithmetic. The U.S. government is having no trouble borrowing to cover its current deficit. It’s true that we’re building up debt, on which we’ll eventually have to pay interest. But if you actually do the math, instead of intoning big numbers in your best Dr. Evil voice, you discover that even very large deficits over the next few years will have remarkably little impact on U.S. fiscal sustainability.
No, what makes America look unreliable isn’t budget math, it’s politics. And please, let’s not have the usual declarations that both sides are at fault. Our problems are almost entirely one-sided — specifically, they’re caused by the rise of an extremist right that is prepared to create repeated crises rather than give an inch on its demands.
The truth is that as far as the straight economics goes, America’s long-run fiscal problems shouldn’t be all that hard to fix. It’s true that an aging population and rising health care costs will, under current policies, push spending up faster than tax receipts. But the United States has far higher health costs than any other advanced country, and very low taxes by international standards. If we could move even part way toward international norms on both these fronts, our budget problems would be solved.
So why can’t we do that? Because we have a powerful political movement in this country that screamed “death panels” in the face of modest efforts to use Medicare funds more effectively, and preferred to risk financial catastrophe rather than agree to even a penny in additional revenues.
The real question facing America, even in purely fiscal terms, isn’t whether we’ll trim a trillion here or a trillion there from deficits. It is whether the extremists now blocking any kind of responsible policy can be defeated and marginalized.

 

[The.Menace]

It was political theater then, and it's political theater now. Nothing more.

Well, it is politics. But it's also more. Because your assets, your rent, maybe your job gets destroyed right there. So it starts as theater, but it's damn real in the end.

@Sofi: It's simple to blame S&P, but the thing is the other rating guys did downgrad the US outlook as well. It's easy to close your eyes and blame S&P, but it might be more useful to actually address the problem. And with what's happening right now, everybody's gonna downgrade the USA......

But the United States has far higher health costs than any other advanced country, and very low taxes by international standards. If we could move even part way toward international norms on both these fronts, our budget problems would be solved.

Plus: Yes. But also the military buget is by FAR higher than from everybody else. Cut this before you cut social benefits and health care!

Plus: You mentioned Marx ..... but now admit that health care costs are way too high? How can that be? Is the free market actually not cost efficient or what? I though 'deregulation' is the best thing and now suddenly the health care costs are above average? How could that be? Maybe some things should be regulated after all?

 

[The.Menace]

One more thing. Let's close rating agencies and change our system, I'm all for it. But since we don't do that and don't want to do that (at least Reps), we gotta thing within this system. And within this system, it was clear what this Tea party bullshit would cause, therefore I blame them. So they don't even get the system they promote and that's the truth..... and if they get it and did it on purpose, they are working against their own people.

 

[S O F I]

Well, it is politics. But it's also more. Because your assets, your rent, maybe your job gets destroyed right there. So it starts as theater, but it's damn real in the end.

@Sofi: It's simple to blame S&P, but the thing is the other rating guys did downgrad the US outlook as well. It's easy to close your eyes and blame S&P, but it might be more useful to actually address the problem. And with what's happening right now, everybody's gonna downgrade the USA......

There's a difference between having a negative outlook and actually downgrading a country's bond rating. I don't think any other agency did what S&P did. I think some Chinese agency but who cares, they'll keep buying our bonds.

Plus: Yes. But also the military buget is by FAR higher than from everybody else. Cut this before you cut social benefits and health care!

There's going to be some cuts. Nothing too much because it's simply not politically feasible.

Plus: You mentioned Marx ..... but now admit that health care costs are way too high? How can that be? Is the free market actually not cost efficient or what? I though 'deregulation' is the best thing and now suddenly the health care costs are above average? How could that be? Maybe some things should be regulated after all?

I mentioned Marx in jest because you seem to suggest an overthrow of the current system.

Also, health care isn't really deregulated. When people mention health care and spending cuts, they're talking about entitlement programs - mainly Medicare and Medicaid, which are federal and/or state government programs.

 

[Jokerman]

Krugman never met a stimulus package he didn't like. Look, we're hearing a lot of criticism of S & P in the media and Congress to the tune of why should we care what they say, they got subprime wrong and missed that. Well, so did the other two leading rating agencies, Moody's and Fitch, and they just gave us AAA ratings. But no one is saying why should we care about their ratings. Why should we think their AAA is any better than the AAA's they gave on bonds backed by sub-prime mortgages, which went to zero? So if these rating agencies give us AAA it means something , but if they downgrade us they had no credibility anyway? We can't have it both ways. The fact is if we're going to question their credibility, which we should, it should be based on the fact that their ratings are too high. Because that's the mistake they made with sub-primes.

And I don't like the Tea Party, but the people who are saying that somehow the Tea Party held everybody hostage and they got a victory, are wrong. The Tea Party was shut out. They wanted real cuts in government spending. The budget compromise had more support in house Republicans than it did in Democrats. So if you think the Tea Party changed the Republican Party, think again. They sold out those Tea Party principles. In fact, any Republicans that voted to increase the National Debt should be voted out of office. Because the problem wasn't the debt ceiling, the problem is the debt. The ceiling might have been all that stood between us and a financial crisis.

 

[The.Menace]

There's a difference between having a negative outlook and actually downgrading a country's bond rating.

Of course there is. But maybe the other two just didn't have the guts to do it, yet.

There's going to be some cuts. Nothing too much because it's simply not politically feasible.

Yeah well, but "not politically feasible" is not what I debate. That's what would be necessary.

I mentioned Marx in jest because you seem to suggest an overthrow of the current system.

Sure, but who said something about Marx? End the Fed, get the Gold standard back and then, close the rating agencies if you want to.

health care isn't really deregulated

Point of view. Compared with Europe, it is.

And about the Tea Party. They act as if Obama made the debt. It's not true. Republican politics, wars under Georg W. Bush is the main reason for the situation right now. The crisis afterwards of course made it worse but they always act as if they didn't have anything to do with it. That's worng. But for some silly reasons voters only remember like....the last 2 years. It was also republican granddad that gave up the gold standard, which led to all the problems we have today in the financial world in my opinion. But Reps don't take that blame, never do, never did. Plus, one more thing. what is the solution THEY offer? I said it before, the pray....for a better rating. Good luck with that.

Plus Jokerman, what exactly is the ceiling what stood between you and a financial crisis? You fell like.....it's all goood and done now? The crisis is over? I'm not so sure man .....

Yeah, many democrats were against this plan, that's true, because they also wanted a change of the tax system. And I agree, that's what would be needed.

 

[The.Menace]

http://www.rollingstone.com/politics/news/matt-taibbi-on-the-tea-party-20100928

 

[Ristol]

Taibbi = dead nice with the journalism.

 

[S O F I]

Sure, but who said something about Marx? End the Fed, get the Gold standard back and then, close the rating agencies if you want to.

Who said something about Marx? I did. It was a joke. Damn it Thomas, when did you lose your sense of humor? Anyway. End the Fed? Get the Gold standard back? That's what the Tea Party advocates.

 

[Jokerman]

Plus Jokerman, what exactly is the ceiling what stood between you and a financial crisis? You fell like.....it's all goood and done now? The crisis is over? I'm not so sure man .....

Not exactly sure what you're saying, but it seems like you misread me. My point was since they voted to increase spending, esp. on the wrong things: war, bailouts, tax breaks for the rich; and make cuts on important social welfare programs, the crisis isn't over, it will be getting worse. We are on the brink of a new recession. Only this time we're already starting with over 9% unemployment.

The Fed announced they would not raise interest rates for the next 2 years. Of course not. Because if they did then government spending would have to stop because we wouldn't be able to pay the interest on the debt. The Fed is trying to prop up a phony economy and in the process they are preventing any kind of real recovery from ever catching hold. All they will be able to do now is print more money, with inflation the likely outcome. A higher dollar and a higher cost of living.

We need a real economy that produces real things, that provides real employment opportunities to our people. We don't have that right now. We have this phony consumer-credit, speculative-based bubble economy where we continuously go deeper and deeper into debt to consume. And we can't do that because eventually we can't pay the bill, nobody will lend us any money, and the whole thing will implode. The dollar will collapse and we will wipe out the savings of generations of Americans.

 

[Pittsey]

We have this phony consumer-credit, speculative-based bubble economy where we continuously go deeper and deeper into debt to consume. And we can't do that because eventually we can't pay the bill, nobody will lend us any money, and the whole thing will implode. The dollar will collapse and we will wipe out the savings of generations of Americans.

The same in Britain.

We don't manufacture anything tangible. We just buy and sell IOU's.

 

[The.Menace]

@Sofi: Yeah, my sense of humor got lost somewhere.

Anyway. End the Fed? Get the Gold standard back? That's what the Tea Party advocates.

Yeah. Just to show you that I'm not all against these ideas. But to hold the country hostage for so long was stupid.

I agree with Jokerman and Pittsey. We need more "real economy" - companies that actually produce something. But one thing is wrong, the dollar will go down not up in the process of inflation.

 

[Jokerman]

 

[The.Menace]

No sane brain can vote for Michelle Bachman